Home Equity Loans on Short Sales gone to collections?
Monday, 26. July 2010
Home Equity Loans on Short Sales gone to collections?
Readers Digest Version: My wife and I purchased a duplex in Kansas to rent out. I lost my job due to a work related injury. We had to short sale our primary home in California and the duplex in Kansas. Once the sales were finished, everything was fine until I received collection calls on the seconds on all three properties. Im confused, how and why can they now attach debt to me even when they were lines of credit on homes that are now sold….HELP
sassy2 Says:
Because you owe the money. the short sale did not repay these lenders.
Lauren F Says:
If you didn’t get the HELOC banks to agree to the short sale, then it is still debt you owe. They only care about recovering the money they gave to you in good faith. Just because the primary/first mortgage agreed to the short sale doesn’t mean the HELOC bank has to agree to it.
You might want to talk with a real estate attorney to see if how the title passed to the new owners and whether or not the liens were included in their title insurance or not. Otherwise, I suspect you are on the hook for the remaining debt.
Sorry – wish I had a better answer.
Help Is Here! Says:
I am not sure why they would be doing it on all 3 especially if the one in CA was your primary residence. CA is a non recourse state, meaning they cannot come after you for the deficiency if it is your primary residence in a short sale. In KS, even if it is a non recourse state, since it was an investment property, they do have the right to come after you for the deficiency.